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The announcement that the USA would re-impose sanctions on Iran that it lifted in January 2016, will have implications for the global oil and gas tube and pipe industry, especially for companies with US assets.

Away from North America, the substantial price discount of Asian plate to European for offering to linepipe producers, is likely to cause problems for European/Russian LSAW mills trying to win pipeline projects in markets such as the Middle East.

There is though growing concern from major API grade plate manufacturers in Western Europe that the demand from the LSAW linepipe mills that buy their plate is not going to be there in the same tonnages in 2019.

MBR understands that Turkish prices for 16”-20” HSAW linepipe to a grade API 5L X65 is around $970-980/tonne fob and for 20” LSAW linepipe is $1,070-1,080/ tonne fob, this is almost unchanged compared to the previous month.

Please join us Thursday June 14, 2018, 2pm UK time for a topical webcast covering the global Large Diameter Linepipe markets as a result of recent Section 232 actions as well as developing scenarios in the rest of the world. MBR examines how the project outlook will shape the fundamentals for the rest of the year and into 2019, with special consideration for the markets in the USA, China, Russia and the Middle East.

The quota amounts for South Korean OCTG and linepipe have been effectively met for the year and will take South Korea out of the market for the rest of the year. This will have a major effect on prices through the end of 2018.

Welded Linepipe & OCTG Market Tracker is the most complete and independent report to give you market analysis and price forecasting for the welded steel tube & pipe market.

Your monthly report includes:

Analysis of key developments in OCTG and linepipe in the Americas, Europe/CIS, MENA, and Asia.

Intelligence on activity by distributors and suppliers.

Information on all capacity changes and enhancements with insight into how these changes will affect market dynamics.

Tracking the changing dynamics of pipeline construction plans and analysis of how that will affect linepipe demand.

Data on trade flows and consumption patterns and their relation to the markets.

Raw materials and substrate pricing in the main consuming areas.

All the major economic drivers of demand.

Independent data including:

Welded tube and pipe prices as well as plate and coil with three-year history and one-year forecast.

North and South American apparent consumption of welded pipe by product with extensive historical data.

Middle East/North Africa apparent consumption of welded pipe by product with three-year history.

Asian welded tube consumption data by product and major country.

European and CIS welded tube apparent consumption data by product by major country.

All subscribers are eligible for regular individual consultations with the editor of the report.

Kim Leppold is a Senior Metals Analyst for Metal Bulletin Research. She is principally responsible for analysis of the North American steel markets, the global tube and pipe markets, as well as the global steelmaking raw materials markets. She is editor of the Welded Linepipe & OCTG Market Tracker, Seamless OCTG & Linepipe Market Tracker and Steel Raw Materials Weekly Market Tracker.

Kim joined MBR in the fall of 2005, following a six-year stint as an Economist for Global Insight. While with Global Insight, she was responsible for overseeing the analysis and forecasting of the economies of the Southwest central United States and consulted on projects concerning economic development issues in regions of Arkansas and West Virginia.

Prior to joining Global Insight, Ms. Leppold served as a consultant for the steel and energy industries, providing commodity market analysis. She holds a Bachelor of Arts degree in Mass Communications and a Master of Science in Mineral Economics from the Pennsylvania State University.

Market Brief

Welded tubes and pipes are formed by shaping and welding HR coil or steel plate, and as such are produced from flat products as opposed the billet or ingot products used to produce seamless pipe. Welded tube and pipe is made to the specifications for grades that serve consuming markets including manufacturing, automotive/ aerospace, construction, structural, decorative, oil and gas drilling, oil, gas and water transmission, geological research, power generation and refineries.

Methods of Production

There are 3 main methods of production for welded tube and pipe electric-resistance (ERW), longitudinal (LSAW or DSAW), and spiral welded.

1. ERW

Electric-resistance welded (ERW) tube and pipe is made by longitudinally welding HR coil. ERW material is typically limited to a maximum of 24 in diameter, due to the typical width of HR coil (maximum of 76 or 2.25m) with an average pipe length of 18m to 24m and a maximum wall thickness of 25mm.

2. Longitudinal welded

Heavy plate is primarily used as the substrate, which is welded using the submerged arc welded (SAW) method, or double submerged arc welded (DSAW). Longitudinal welded pipe is created with a straight seam welded along the length of the pipe. Common pipe lengths are 12m to 18m although new production methods can go longer. There are 3 manufacturing routes for this type of pipe:

UOE- The flat plate is pressed and bent into a U shape and then into an O shape. The pipe is welded and expand (E) into the proper diameter. The standard diameter ranges between 20-56, limited by the width of the substrate plate thickness.

JCOE- The flat plate is pressed and bent into a J shape and then a C shape and closed into an O shape. Similar to UOE, the pipe is welded and then expanded (E) into the proper diameter. This manufacturing route is most popular in India and can have a maximum wall thickness of 60mm.

Roll bending- The flat plate passes through a series of rollers that bend the pipe into an O shape. While this manufacturing technique is slower than UOE, the pipe can be produced with a larger diameter, up to 100 with an average length of 12m.

3. Spiral welded

Spiral welded is produced by winding and welding steel plate or thick HR coil in a circular fashion. This method allows for increased sizes and lengths. Diameters range between 24  200, while maximum wall thickness is about 20-25mm. The welding technique is referred to as Helical SAW (HSAW). Spiral welding is dominant in emerging markets and in new capacities in comparison to longitudinal pipe, as it is historically up to 15% less expensive to produce.

Welded Tube and Pipe Classifications

1. Welded linepipe

Welded linepipe is classified as any tube or pipe that carries liquids or gas across land, including oil, natural gas, or water. The pipe is laid in a horizontal direction, a key differences between linepipe and OCTG material. After production, tube and pipes are transported to the site and welded together to form the linepipe. The linepipe products are some of the highest priced of the steel products. They are classified under the American Petroleum Institute (API) specifications (API 5L).

2. Welded OCTG pipe

Oil country tubular goods (OCTG) pipe is used for carrying oil and gas in a vertical direction, as opposed to horizontal, once a new oil and gas rig has been drilled. Casing is used to protect the tubing, which runs inside the drilled hole, down to the oil or gas well. Tubing or lifting pipe runs down the middle of a well bringing liquid/ gas to the surface or injecting water into the well. Drill pipe is tube that is used to hold the drill bit or explosives. Welded OCTG tube and pipes are not welded together onsite, pipes are instead coupled together using threading techniques specific to the environment and substance being extracted. Welded OCTG pipes are classified under the American Petroleum Institute API with non-heat treated grades including J and K grades, the lowest API classification, and heat treated including N80 type Q, P110, L80. Heat treated grades are for drilling in more difficult or caustic environments.

Outside of North America, OCTG tubing and casing is dominated by seamless material, as opposed to welded OCTG. About 29% of the total OCTG market is welded pipe, while the remaining 71% of is seamless. NAFTA is the worlds largest market for OCTG products, representing 42% of global consumption in 2012.